The Rural Voice, 2002-06, Page 56Agrilaw
I.L.O. Neighbours - Propertg Tax Relief
By Paul Vogel
Intensive livestock operations may
incur liability to neighbours and the
surrounding community for adverse
effects on the environment and
interference with property use. Those
living in close proximity to such
facilities may well be concerned
about diminishment in the value of
their property. Are such concerns
valid? If so, should the municipalities
in which such facilities are located be
concerned about deterioration of
these property values for property tax
assessment purposes?
The Nebraska Court of Appeals
recently considered a property tax
appeal by a taxpayer living within
one mile of a hog farrowing facility
housing 5,200 hogs. The taxpayer's
position, supported by expert
appraisal evidence, was that the hog
farrowing facility and associated
manure spreading would result in at
least a 30 per cent reduction in the
assessed value of his property. In
allowing the taxpayer's appeal from
an earlier decision of a review
tribunal which had upheld the higher
assessment, the Court concluded:
"No reasonable fact finder could
conclude that in the real estate
marketplace, a potential buyer
would not notice, and react
economically, to having a large
hog facility very nearby while
living in a remote location. Thus,
the (review tribunal's) decision
upholding that valuation was
arbitrary and capricious."
In coming to this decision, the
Court determined that, for the
purpose of property tax assessment, a
property must be assessed at market
value and not cost. Essential to the
consideration of market value is "the
effect of the house's location next to
a hog facility and manure easement."
The Court stated:
"The whole concept of
determining value must assume
both a willing buyer and seller...In
the context of negotiations
between a willing buyer and seller
to arrive at fair market value, the
neighbouring hog facility and the
house's location would
52 THE RURAL VOICE
unquestionably affect the market
value of (the taxpayer's) house. •
Any other conclusion would mean
that two identical houses, one
located next to the railroad
switching yard and the other next
to the country club golf course,
have identical values — an
obviously arbitrary and illogical
conclusion that no reasonable
person would reach...
"That many potential buyers
would not look favourably upon
the hog facility, and judge the
home's value with reference
thereto, is demonstrated by (other
cases) in which homeowners have
successfully sued hog facility
owners for damages caused by
interference with the use of their
nearby homes."
Neighbours of intensive livestock
operations may recover from the
operations of such facilities
compensation for the impacts these
facilities have on the environment
and neighbouring property owners'
use and enjoying of their property. Of
some small comfort to these
landowners, these adverse impacts
may also justify a reduction in the
property tax assessment of their
properties. This erosion of
assessment values and reduction of
the tax base should be.of concern to
municipalities permitting the
construction of these facilities.0
Agrilaw is a syndicated column
produced by the full service London
law firm of Cohen Highley LLP. Paul
G. Vogel, a partner in the firm,
practices in the area of commercial
litigation and environmental law.
Agrilaw is intended to provide
information to farm operators on
topics of interest and importance. The
opinions expressed are not intended
as legal advice. Before acting on any
information contained in this column,
readers should obtain legal advice
with respect to their own particular
circumstances and geographical
area.
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